Bad data is costing UK-based businesses millions each year.
Most businesses understand the need for a customer relationship management (CRM) system. They invest in a platform such as Salesforce, Zoho, Hubspot, Marketo or Pipedrive and believe that pipeline management and deal flow will naturally improve.
However, most CRM systems end up gathering digital dust. This is because CRM systems are built on data, which means the data needs to be managed. The flow of inbound leads must be monitored to ensure that only good data is inputted into the system for sales executives and account managers to work with.
The next step is for businesses to use the data they have collected. “We work with so many companies that collect data, plug it into their CRM systems and then don’t use it. Instead of getting the most from the data they have, their marketing teams continue to send marketing messages to unknown leads, and sales executives continue cold calling. Meanwhile, they’re sitting on warm leads that get colder by the day,” says Matt Brown, CEO of Digital Kungfu, a storytelling production company for technology businesses.
If you think that this isn’t happening in your business, think again. An MIT study of 75 enterprises found that only 3% of data sets were within an acceptable range, and 50% contained severe errors.
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In the UK, The Royal Mail’s report on The use and management of customer data, reveals that basic data errors continue to contribute to poor quality customer data. Marketers identify out-of-date information as their number one problem, although incomplete data scores higher in the report when second and third ranks are included.
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“Bad data leads to under-performing marketing campaigns because marketing teams don’t know who they are targeting, which results in high bounce rates as the wrong people are connected with online. Businesses run the risk of being blacklisted by ISPs, and hundreds of valuable hours are spent cleaning lists instead of engaging with the right people,” says Brown.
“In addition, sales can’t sell. Salespeople end up spending most of their time building lists and verifying emails instead of actually selling. Research shows that most sales executives spend more than 60% of their time on non-sales activities.”
Avoiding the trap of dumb data
Digital Kungfu’s CRM Zen solution is designed to help businesses mine their existing CRM data. “When you start using your data properly, two things happen,” says Brown. “First, you’re connecting with warm leads that have already engaged with your brand in some way, which significantly improves your chances of closing deals.
“Second, your marketing team can concentrate on messaging that speaks to a known quantity, instead of sending messages into the market with no clear idea of who is receiving them. There is so much data in a CRM system, but it’s essentially dumb data when it isn’t used.”
Unfortunately, the result is diminishing returns coupled with ever-increasing costs.
“Businesses are paying CRM licenses, and there is generally an internal resource hired to manage the entire system. Account managers and sales executives are updating it daily as well. That’s hours and hours of productive time spent inputting numbers that aren’t appropriately utilized – if they’re ever looked at again.
“Most sales executives open their CRMs and start calling numbers from the top. That’s not using a CRM system to close deals and craft smart, targeted marketing messages. That’s a glorified phonebook. And how much is it costing you?”
A CRM system is only as good as the data it holds
Instead of a sales manager or account director managing a CRM system when they should be managing people, businesses can now outsource the management of their CRM systems to an executional partner that understands the power of the data housed within the system.
“A CRM system is only as good as the data held within it – and how well it is used. As a data business, we bring value-added services to our clients with CRM systems that allow them to use the data they have to build pipelines and close deals.”
When businesses maximise the data they have, they reduce costs and save on overheads because they are working with existing leads instead of trying to generate new leads.
According to research conducted by OutboundEngine, it costs five times more to acquire a new customer than it does to retain an existing customer. The success rate of selling to a customer you already have is 60% to 70%, while the success rate of selling to a new customer is only 5% to 20%. And yet if CRM data is not being used adequately, how many existing and past customers does an organization actually connect with?
The solution is managing CRM data effectively and efficiently. The result? Better lead management, more successful deal opportunity management, pipeline management, direct marketing management and much higher win/loss ratios thanks to the ability to track these ratios and help sales executives target the right prospects in the right way. But it all starts with the data.
Download Digital Kungfu’s eBook: 6 proven strategies that deliver sale qualified pipeline during a recession to discover how to implement these 6 strategies in your business and increase sales your sales today.
